Inflation leaps to 2.3pc in February - higher than expected

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Inflation leaps to 2.3pc in February - higher than expected

The figure will put pressure on the Bank's Monetary Policy Committee to hike interest rates beyond 0.25% this year.

The pound has surged against the dollar after the Office for National Statistics (ONS) reported inflation hit 2.3%, well ahead of January's 1.8% reading and surpassing investors' expectations.

United Kingdom inflation in February crashed up though the Bank of England's target level, with a higher rate than was expected and the highest since September 2013.

Rising transport costs caused by increases in the price of fuel were one of the main drivers of the headline increase in prices, the ONS said. Food prices rose 0.3pc last month having fallen consistently for the past two and a half years.

Meanwhile, food prices had a small upward effect on inflation for the first time since 2014.

ONS also reported the new measure of CPIH, which includes housing, also rose to 2.3% from 1.9%, beating the forecast for 2.2%.

The Brexit vote last June prompted a steep fall in the value of the pound, making imported goods more expensive.

Last week, the Bank of England reiterated it will tolerate inflation overshooting its target only as long as it supports the economy.

However, economic think tank EY Item Club expects consumer spending growth to slump to a four-year low for 2017, as households feel the pinch from inflation, welfare cuts and weaker earnings.

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